TIDMALOG
RNS Number : 8483S
AsianLogic Limited
27 May 2009
Not for release, publication or distribution, in whole or in part, in, into or
from any prohibited territory or jurisdiction where to do so would constitute a
violation of the relevant laws of such jurisdiction
AsianLogic Limited
("AsianLogic" or "the "Company")
Proposed cancellation of admission to trading on AIM
Proposed Tender Offer
1. Introduction
On 19 February 2009, the Company announced that it had initiated a strategic
review to determine the most appropriate manner in which to prioritise
shareholder value. Following the conclusion of this strategic review the Board
has resolved, subject to the approval of Shareholders, to cancel the admission
of its Ordinary Shares from trading on AIM.
The Board recognises that not all Shareholders will be able or willing to
continue to own Ordinary Shares following the De-Listing. Although it is under
no formal obligation to do so, the Board is therefore arranging for Collins
Stewart to provide Shareholders at the Tender Offer Record Date with the
opportunity to sell their Ordinary Shares to the Company (through Collins
Stewart) pursuant to the Tender Offer. The price to be paid for each Ordinary
Share subject to the Tender Offer is 25 pence.
The Company has today posted a circular (the "Circular") to shareholders which
sets out, inter alia, the terms of the Tender Offer and seeks Shareholder
approval for (i) the cancellation of admission to trading on AIM of its Ordinary
Shares and (ii) adopting revised memorandum and articles of association of the
Company with effect from the De-Listing.
A copy of the Circular will be available on the Company's website
(www.asianlogic.com).
2. The De-Listing
Reasons for the De-Listing
Since the Ordinary Shares were first admitted to trading on AIM at the end of
2007, stock market conditions have undergone a significant deterioration. When
combined with tougher trading conditions for the Group's operational business,
the Board believes that the rationale for remaining as a publicly quoted company
has been significantly undermined and that greater shareholder value will be
derived by operating the Group's business off-market for the immediate future.
In reaching this conclusion, the Board has focused on the following key factors:
* Trading volumes in the Ordinary Shares are very low. In the twelve months to 26
May 2009 (the last practicable date prior to this announcement) there were 170
trading days when no Ordinary Shares were traded on AIM (64.65 per cent. of
trading days);
* The Company, like many other quoted AIM companies of its size, has a tightly
held register of shareholders and suffers from a lack of liquidity for its
Ordinary Shares. The current share register shows that approximately 43 per
cent. of the Existing Issued Shares are held by six shareholders (excluding
directors and senior management). In practical terms, this results in a small
free float and low trading volumes, which further reduces the demand for the
Ordinary Shares;
* It is unlikely in the context of current market conditions that the Company will
need or be able to raise money through a new share issue or issue new shares in
connection with an acquisition and therefore the lack of Ordinary Shares in free
float and low volumes can be expected to continue;
* The Board believes that there is a limited investor appreciation of the
Company's business areas and an increasing difficulty in attracting and
maintaining institutional investors in the Company, particularly in the current
economic environment;
* In light of the limited trading in the Ordinary Shares, the tangible costs
associated with maintaining the AIM quotation is disproportionately high when
compared to the benefits and the Directors consider that these funds could be
better utilised in running the business;
* The management time and the legal and regulatory burden associated with
maintaining the Company's admission to trading on AIM is disproportionate to the
benefits to the Company; and
* The current economic climate has resulted in significant falls in the values of
global stock markets, from which the Company is not immune. The susceptibility
of the Company's share price to the wider general equity market conditions is
not of benefit to the marketing of the Group's operational business.
Accordingly, the Directors strongly believe that it is no longer in the best
interests of the Company or its Shareholders as a whole for the Company to
retain its AIM quotation.
Effect of the De-Listing
The principal effect of the De-Listing is that Shareholders will no longer be
able to buy and sell Ordinary Shares through a public stock market; that is
liquidity in the Ordinary Shares will be very limited. It is for this reason
that the Tender Offer is being made.
It is also proposed to cancel the depositary interest facility to Depositary
Interest Holders shortly following De-Listing. Following this time, Ordinary
Shares will only be capable of being held in certificated form.
However, in order to provide a measure of liquidity in the Ordinary Shares
following the De-Listing, the Company intends to set up and maintain a matched
bargain settlement facility. Under this facility, Shareholders or persons
wishing to acquire Ordinary Shares will be able to leave an indication with the
facility provider that they are prepared to buy and sell Ordinary Shares at an
agreed price. In the event that the facility provider is able to match that
order with an opposite sell or buy instruction, the facility provider would
contact both parties and effect the order. Shareholders who do not have their
own broker may need to register with the facility provider or a broker as a new
client. This can take some time to process and therefore Shareholders who
consider they are likely to avail themselves of this facility are encouraged to
register at the earliest opportunity.
The contact details of the matched bargain settlement facility provider, once
arranged, will be made available to Shareholders on the Company's website.
A shareholders' agreement has also been entered into between the Key
Shareholders and the Company to regulate certain matters following De-Listing,
including, amongst other things, transfers of Ordinary Shares by the Key
Shareholders, pre-emption rights on the transfer of Ordinary Shares held by the
Key Shareholders, certain matters in respect of the running of the Company and
rights to certain information regarding the Company. Further details are set out
in the Circular.
Summary
The Board has accordingly concluded that it is in the best interests of
Shareholders as a whole that the De-Listing be approved.
Under the AIM Rules for Companies, the De-Listing can only be effected by the
Company after the passing of a resolution approved by at least 75 per cent. of
the votes cast by Shareholders in general meeting, and the expiration of a
period of twenty Business Days from the date on which notice of the De-Listing
is given. In addition, a period of at least five Business Days following the
Shareholder approval of the De-Listing is required before the De-Listing may be
put into effect.
The first resolution contained in the Notice of EGM seeks Shareholders' approval
for the De-Listing. The Company and Collins Stewart have received irrevocable
undertakings from Shareholders holding, in aggregate, 54,909,094 Ordinary
Shares, representing 63.67 per cent. of the Existing Issued Shares, to vote in
favour, or procure that their Ordinary Shares are voted in favour, of the
De-Listing. In addition, the Company and Collins Stewart have received letters
of intent from certain Shareholders holding, in aggregate, 11,526,234 Ordinary
Shares at the date of this announcement, representing 13.37 per cent. of the
Existing Issued Shares, that they currently intend to vote in favour, or procure
that their Ordinary Shares are voted in favour, of the De-Listing. Assuming that
Shareholders approve this resolution, it is proposed that the De-Listing would
take place by 3 July 2009.
Shareholders should note that there is no minimum acceptance level which must be
reached under the Tender Offer to prevent the Board from continuing with the
De-Listing.
3. Tender Offer
The Tender Offer is to be effected by Collins Stewart purchasing Tender Offer
Shares as principal and then selling such Tender Offer Shares on AIM to the
Company for cancellation pursuant to the Repurchase Agreement. The price to be
paid for each Ordinary Share subject to the Tender Offer is 25 pence which
represents an 11.11 per cent. premium to yesterday's mid-market closing price of
22.5 pence.
The Tender Offer will be open to all Tender Offer Shareholders on the Company's
share register on the Tender Offer Record Date. Tender Offer Shareholders may
participate in the Tender Offer by tendering any part or all of their registered
holdings of Ordinary Shares. Each Tender Offer Shareholder will be entitled to
sell under the Tender Offer any part or all of the Ordinary Shares registered in
his name on the Tender Offer Record Date. The Ordinary Shares purchased under
the Tender Offer will then be cancelled once purchased by the Company pursuant
to the terms of the Repurchase Agreement.
The Company and Collins Stewart have received irrevocable undertakings from the
Directors and other Shareholders holding, in aggregate, 54,909,094 Ordinary
Shares at the date of this announcement, representing 63.67 per cent. of the
Existing Issued Shares, that they will not accept or procure the non-acceptance
of the Tender Offer in respect of all of those Ordinary Shares. Consequently,
the maximum number of Ordinary Shares which may be purchased in the Tender Offer
is 31,325,624 Ordinary Shares representing 36.33 per cent. of the Existing
Ordinary Shares.
In addition, the Company and Collins Stewart have received letters of intent
from certain Shareholders currently holding, in aggregate, 11,526,234 Ordinary
Shares at the date of this announcement, representing 13.37 per cent. of the
Existing Issued Shares, that they currently intend not to accept or procure the
non-acceptance of the Tender Offer in respect of all of those Ordinary Shares.
4. Articles
The Company is proposing the adoption of new memorandum and articles of
association to take effect from the De-Listing, to more accurately reflect the
fact that the Company will be an unlisted company following the De-Listing. As
such, Shareholders following De-Listing will no longer enjoy a number of
protections inserted into the current memorandum and articles of association of
the Company at the time of Admission which sought, inter alia, to replicate
certain protections afforded by the UK City Code on Takeovers and Mergers,
although the new Articles will contain, inter alia, 'drag along' and 'tag along'
provisions. These are designed to make it easier to sell the Company in the
event that a buyer can be found
at a price that is attractive to the majority of Shareholders.
Further details of the proposed new memorandum and articles of association are
set out in the Circular. A copy of the proposed new memorandum and articles of
association will be available for inspection by Shareholders during usual
business hours (Saturday, Sunday and public holidays excepted) until the close
of the Extraordinary General Meeting at the offices of the Company's solicitors
as to English law, Berwin Leighton Paisner LLP, Adelaide House, London Bridge,
London EC4R 9HA.
Resolution 2 in the Notice of EGM seeks Shareholder approval for the adoption of
the new memorandum and articles of association. The Company and Collins Stewart
have received irrevocable undertakings from the Directors and other Shareholders
holding, in aggregate, 54,909,094 Ordinary Shares, representing 63.67 per cent.
of the Existing Issued Shares, that they will vote in favour of, or procure that
their Ordinary Shares are voted in favour of, the resolution for the adoption of
the new memorandum and articles of association. In addition, the Company and
Collins Stewart have received letters of intent from certain Shareholders
(details of which are set out above) currently holding, in aggregate, 11,526,234
Ordinary
Shares at the date of this announcement, representing 13.37 per cent. of the
Existing Issued Shares, that they currently intend to vote in favour, or procure
that their Ordinary Shares are voted in favour, of the resolution for the
adoption of the new memorandum and articles of association.
5. Current Trading
AsianLogic released its preliminary results for the year ended 31 December 2008
on 30 April 2009. Further to the update given at that time, the Board's outlook
for 2009 remains unchanged.
6. Employee Share Scheme
Following completion of the De-Listing, the Company intends to establish a
scheme pursuant to which Ordinary Shares may, with the authority of the
Directors, be issued to employees of (or consultants to) the Company. The
maximum number of Ordinary Shares issued under such scheme shall be 12.5 per
cent. of the total issued Ordinary Shares of the Company (excluding treasury
shares) following completion of the Tender Offer.
7. Non-executive Directors
Notwithstanding that following De-Listing, the Company will no longer be quoted
and subject to various investor protection guidelines, both Jong-Dae Lee and
Jonathan Hubbard have agreed with the Company to remain as non-executive
directors of the Company. As such, and conditional upon the De-Listing, they
have each agreed to a reduction in their annual fees (exclusive of any VAT) to
US$15,000.
On Admission, Jong-Dae Lee and Jonathan Hubbard were each granted options over
70,000 Ordinary Shares at an exercise price of 111.62 pence which vested as to
15 per cent. on the first anniversary of Admission, with the remainder vesting
as to 30 per cent. and 55 per cent. on the second and third anniversaries of
Admission. Of the options that have vested, none of them have been exercised by
either Mr Lee or Mr Hubbard and, taking account of the fact that the options are
significantly "under water" with regard to the current share price, Mr Lee and
Mr Hubbard have today agreed with the Company, conditional upon the De-Listing,
to surrender their options in full.
8. Recommendation
The Directors unanimously recommend that Shareholders vote in favour of the
Resolutions as they have undertaken to do in respect of their own current
beneficial holdings of 31,592,247 Ordinary Shares, representing 36.64 per cent.
of the Existing Issued Shares.
The Directors recommend that all Tender Offer Shareholders consult their duly
authorised
independent advisers before they make a decision as to whether to tender their
Tender Offer Shares, in order to obtain advice relevant to their particular
circumstances.
The Directors consider, having consulted with Collins Stewart, in its capacity
as the Company's nominated adviser that the terms of the Tender Offer are fair
and reasonable insofar as the Shareholders are concerned.
Tom Hall, Executive Vice Chairman of AsianLogic said:
""The Board has unanimously decided to recommend delisting to the shareholders
as we feel that the current economic environment means there is little benefit
to AsianLogic and its shareholders in remaining listed. The delisting will
reduce costs and management time associated with a listing on AIM and will
enable AsianLogic to focus its operations to better service our shareholders,
business partners and customers alike."
- ends -
For further information contact:
Tom Hall, Executive Vice Chairman
AsianLogic Ltd +852 9037 3749
Piers Coombs / Adam Cowen
Collins Stewart - Nominated Adviser to AsianLogic Ltd +44 207 523 8350
David Rydell / Samantha Boston
Bell Pottinger Corporate & Financial +44 207 861 3232
Definitions
+-----------------------------------+------------------------------------+
| "Admission" | means admission of the Ordinary |
| | Shares to trading on AIM, which |
| | took place on 28 December 2007 |
| | |
+-----------------------------------+------------------------------------+
| "AIM" | AIM, a market operated by the |
| | London Stock Exchange |
| | |
+-----------------------------------+------------------------------------+
| "AIM Rules for Companies" | the AIM Rules for Companies |
| | published by the London Stock |
| | Exchange from time to time |
| | |
+-----------------------------------+------------------------------------+
| "Articles" | the memorandum and articles of |
| | association of the Company |
| | proposed to be adopted at the EGM |
| | |
+-----------------------------------+------------------------------------+
| "Board" or "Directors" | the directors of the Company |
| | |
+-----------------------------------+------------------------------------+
| "Business Day" | any day on which banks are |
| | generally open in England and |
| | Wales for the transaction of |
| | business, other than a Saturday, |
| | Sunday or public holiday |
| | |
+-----------------------------------+------------------------------------+
| "De-Listing" | the cancellation of admission of |
| | the Ordinary Shares to trading on |
| | AIM |
| | |
+-----------------------------------+------------------------------------+
| "Depositary Interest Holder" or | a holder of Depositary Interests |
| "DI Holder" | |
+-----------------------------------+------------------------------------+
| "Extraordinary General Meeting" | the general meeting of the Company |
| or "EGM" | convened for 10.00 a.m. (Hong Kong |
| | time) on 26 June 2009 at Baker |
| | Tilly Hong Kong Limited, 12th |
| | Floor, China Merchants Tower, Shun |
| | Tak Centre, 168-200 Connaught Road |
| | Central, Hong Kong |
| | |
+-----------------------------------+------------------------------------+
| "Existing Issued Shares" | 86,234,718 Ordinary Shares, |
| | representing the number of |
| | Ordinary Shares in issue |
| | (excluding Treasury Shares) as at |
| | the date of this announcement |
| | |
+-----------------------------------+------------------------------------+
| "Group" | the Company and its subsidiary |
| | undertakings |
| | |
+-----------------------------------+------------------------------------+
| "Key Shareholders" | the Shareholders who are party to |
| | the shareholders' agreement |
| | described in paragraph 5 of Part 1 |
| | of the Circular who, as at the |
| | date hereof, are Thomas Hall, |
| | TSLIB Limited, Christopher Parker, |
| | Chi Kan Tang, Gary Underwood, |
| | Itamar Shamshins, Robert Evans, |
| | Playtech Limited, Instanz Nominees |
| | Pty Limited, Everest Capital |
| | Emerging Markets Fund LP, Everest |
| | Capital Euro Fund LP and Everest |
| | Capital Global Fund LP |
| | |
+-----------------------------------+------------------------------------+
| "Notice" or "Notice of EGM" | notice of the Extraordinary |
| | General Meeting set out at the end |
| | of the Circular |
| | |
+-----------------------------------+------------------------------------+
| "Ordinary Shares" or "AsianLogic | the shares of no par value each of |
| Shares" | the Company |
| | |
+-----------------------------------+------------------------------------+
| "Repurchase Agreement" | the agreement of today's date made |
| | between the Company and Collins |
| | Stewart for the repurchase by the |
| | Company, as an on market purchase |
| | on the London Stock Exchange, of |
| | the Ordinary Shares purchased by |
| | Collins Stewart pursuant to the |
| | Tender Offer |
| | |
+-----------------------------------+------------------------------------+
| "Shareholders" | holders of Ordinary Shares |
| | (including both Certificated |
| | Shareholders and Depositary |
| | Interest Holders) |
| | |
+-----------------------------------+------------------------------------+
| "Tender Offer" | the tender offer to Tender Offer |
| | Shareholders to be made by Collins |
| | Stewart on the terms and subject |
| | to the conditions set out in this |
| | document and, in the case of |
| | certificated Ordinary Shares only, |
| | the Tender Form |
| | |
+-----------------------------------+------------------------------------+
| "Tender Offer Record Date" | close of business on 23 June 2009 |
| | |
+-----------------------------------+------------------------------------+
| "Tender Offer Shares" | Ordinary Shares to which the |
| | Tender Offer relates being, in |
| | aggregate, the total number of |
| | Ordinary Shares in issue on the |
| | Tender Offer Record Date other |
| | than (i) the Treasury Shares; and |
| | (ii) those Ordinary Shares held by |
| | certain Shareholders who have |
| | irrevocably committed to not |
| | participate in the Tender Offer at |
| | all, further details of which is |
| | set out in paragraph 3 of Part 1 |
| | of the Circular |
| | |
+-----------------------------------+------------------------------------+
| "Tender Offer Shareholders" | holders of Tender Offer Shares |
| | (other than certain Overseas |
| | Shareholders) |
| | |
+-----------------------------------+------------------------------------+
| "United Kingdom" or "UK" | United Kingdom of Great Britain |
| | and Northern Ireland |
| | |
+-----------------------------------+------------------------------------+
Expected Timetable of Principal Events
+-------------------------------------------+----------------------------+
| Tender Offer commences | 27 May 2009 |
+-------------------------------------------+----------------------------+
| Latest time and date for receipt of Form | 10.00 a.m. (Hong Kong |
| of Instruction for the Extraordinary | time) on 23 June 2009 |
| General Meeting | |
+-------------------------------------------+----------------------------+
| Latest time and date for receipt of | 1.00 p.m. on 23 June 2009 |
| Tender Forms and share certificates for | |
| certificated Tender Offer Shares | |
+-------------------------------------------+----------------------------+
| Transfer to escrow account of tendered | 1.00 p.m. on 23 June 2009 |
| Depositary Interests settled by | |
+-------------------------------------------+----------------------------+
| Tender Offer closes | 1.00 p.m. on 23 June 2009 |
+-------------------------------------------+----------------------------+
| Tender Offer Record Date | close of business on 23 |
| | June 2009 |
+-------------------------------------------+----------------------------+
| Latest time and date for receipt of Form | 10.00 a.m. (Hong Kong |
| of Proxy for the | time) 24 June 2009 |
| Extraordinary General Meeting | |
+-------------------------------------------+----------------------------+
| Announcement of take-up level under the | 8.00 a.m. on 25 June 2009 |
| Tender Offer by | |
+-------------------------------------------+----------------------------+
| Extraordinary General Meeting | 10.00 a.m. (Hong Kong |
| | time) on 26 June 2009 |
+-------------------------------------------+----------------------------+
| Annual General Meeting | 11.00 a.m. (Hong Kong |
| | time) on 26 June 2009 |
+-------------------------------------------+----------------------------+
| Purchase of Tender Offer Shares under the | 29 June 2009 |
| Tender Offer | |
+-------------------------------------------+----------------------------+
| CREST accounts credited with Tender Offer | 29 June 2009 |
| proceeds | |
+-------------------------------------------+----------------------------+
| Despatch of cheques for Tender Offer | by 29 June 2009 |
| proceeds | |
+-------------------------------------------+----------------------------+
| Despatch of share certificates for Tender | by 29 June 2009 |
| Offer Shareholders not tendering their | |
| entire holding of Ordinary Shares | |
+-------------------------------------------+----------------------------+
| Cancellation of admission of Ordinary | by 3 July 2009 |
| Shares to trading on AIM | |
+-------------------------------------------+----------------------------+
| Cancellation of Depositary Interest | 14 July 2009 |
| facility | |
+-------------------------------------------+----------------------------+
| Despatch of share certificates to those | by 21 July 2009 |
| holders of Depositary Interests on the | |
| date of the cancellation of the | |
| Depositary Interest facility | |
+-------------------------------------------+----------------------------+
If any of the above times and/or dates change, the revised times and/or dates
will be notified to Shareholders by announcement through a Regulatory
Information Service.
All times unless otherwise stated are references to London time. Hong Kong time
is 7 hours ahead of London time.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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